1+1 Canada BorderServices Agency

Agence des servicesfrontaliers du Canada

OTTAWA, April 21, 2009

4366-24AD1190

STATEMENT OF REASONS

Concerning the termination of an undertaking by the President of theCanada Border Services Agency under subsection 52(1.2)

of the Special Import Measures Actrespecting

FILTER-TIPPED CIGARETTE TUBES, EXCLUDING THOSE WHICH BEARTHE TRADEMARK OR BRAND NAME OF A FINISHED OR READY-MADE

CIGARETTE, ORIGINATING IN OR EXPORTED FROM FRANCE

DECISION

On April 6, 2009, pursuant to subsection 52(1.2) of the Special Import Measures Act, thePresident of the Canada Border Services Agency determined that the condition describedin paragraph 49(1)(b) of SIMA, under which the undertaking was accepted, would nolonger exist in the absence of the undertaking. Accordingly, the undertaking wasterminated in accordance with subsection 52(1.2) of SIMA.

Cet Énoncé des motifs est également disponible en français. Veuillez consulter la section Information.This Statement ofReasons is also available in French. Please refer to the "Information" section.

Canada

TABLE OF CONTENTS

SUMMARY 1LEGISLATIVE REQUIREMENTS 2BACKGROUND 2PRODUCT INFORMATION 3

Product Definition 3Product Description 4

CLASSIFICATION OF IMPORTS 4PERIOD OF REVIEW 4CANADIAN INDUSTRY 4CANADIAN MARKET 5UNDERTAKING 6COMPLIANCE 6PARTICIPANTS IN THE REVIEW OF THE UNDERTAKING 6INFORMATION USED BY THE PRESIDENT 7

Administrative Record 7PROCEDURAL ISSUES 7POSITION OF THE PARTIES 7

GIZEH Raucherbedarf GmbH 7CONSIDERATION AND ANALYSIS 8

Likelihood of Continuation or Resumption of Dumping 9Likelihood of Injury to the Domestic Industry 10Termination Il

CONCLUSION 12FUTURE ACTION 13INFORMATION 13

Anti-dumping and Countervailing Program

SUMMARY

[1] On January 5,2009, the President of the Canada Border Services Agency (CBSA)(President) issued a notiee and initiated a review, pursuant to subsection 53(1) of theSpecial Import Measures Act (SIMA) (see Legislative Requirements section)l, of theUfldertaking with respect to filter-tipped cigarette tubes, excluding those which bear thetrademark or brand name of a finished or ready-made cigarette, originating in or exportedfrom France. The undertaking expires on April 7, 2009.

[2] The President must review the undertaking before the expiry of five years after thedate on which the undertaking was last renewed. If, on review, the President is satisfiedthat the undertaking continues to serve the purpose for which it was intended and that heis not required to terminate the undertaking, the President is required to renew theundertaking for a further period of not more than five years.

[3] At the time of its acceptanee, the undertaking subject to this review accounted foraH or substantiaHy aH of the dumped goods and eliminated the injury caused by thedumping.2 The undertaking provided that the priees of the imported goods wouldincrease to a level sufficient to eliminate the injury caused to the domestic industry by thedumping, but not sufficient to eliminate the dumping. That is, the priees agreed to in theundertaking were below the estimated normal values. Sinee its acceptance, andsubsequent renewal, the undertaking has not been violated.

[4] An analysis of the information obtained during the course ofthis undertakingreview indicates that conditions under which the undertaking was originaHy aceepted(elimination of injury caused by the dumping), would no longer exist if the undertakingwere terminated as there is no longer any production in Canada of like goods.

[5] For the foregoing reasons, the President, having considered the relevantinformation on the record, terminated the Ufldertaking on April 6, 2009, pursuant tosubsection 52(1.2) of SIMA, as the condition in paragraph 49(1)(b) would no longer existif the undertaking was terminated. Pursuant to subsection 52(1.3), such determinationterminated aH proeeedings under SIMA respecting the dumping of the goods subject tothe undertaking.

1 Special Emport Measures Act, R.S., 1985, c. S-15, s. 2; R.S., 1985, c. 23 (lst Supp.), s. 1, c. 1 (2nd Supp.),ss. 197,213, c. 47 (4th Supp.), s. 52; 1988, c. 65, s. 23; 1993, c. 44, s. 201; 1994, c. 13, s. 7, c. 47, ss. 144,185.2 Exhibit 10: Exporter - Non-Confidential version ofthe undertaking submitted to the Deputy Minister ofNational Revenue.

Anti-dumping and Countervailing Program Page 1

LEGISLATIVE REQUIREMENTS

[6] On April 15, 2000, certain provisions of SIMA were amended by theimplementation of Bill C-35, "An Act to amend the Special Import Measures Act and theCanadian International Trade Tribunal Act". Transitional measures provide that wherethe original investigation has been put on hold upon acceptance of the undertaking,legislation which was in force at the time of the acceptance of the properly documentedcomplaint continues to apply to subsequent reviews. As such, the SIMA legislationapplicable to this action is that which was brought into force on January 1, 1995. ThatSIMA legislation contains references to the Deputy Minister of National Revenue(Deputy Minister). Upon creation of the Canada Customs and Revenue Agency onNovember 1, 1999, the position of Deputy Minister was changed to Commissioner.Then, on December 12,2003, upon creation of the CBSA, the positionofCommissionerwas changed to President.

BACKGROUND

[7] On October 19, 1998, the Deputy Minister (now the President of the CBSA)initiated an investigation respecting the alleged injurious dumping of filter-tippedcigarette tubes, exc1uding those which bear the trademark or brand name of a finished orready-made cigarette, originating in or exported from France and the Federal Republic ofGermany?

[8] The investigation was initiated in response to a complaint filed by CTC TubeCompany of Canada Inc. (CTC Tube) of Montréal-Nord, Quebec.4

[9] On January 18, 1999, the Deputy Minister terminated the proceedings with respectto the subject goods originating in or exported from the Federal Republic of Germany inaccordance with paragraph 35(1)(c) of SIMA as the actual and potential volumes ofdumped goods from that country were negligible.5

[10] On the same date, the Deputy Minister made a preliminary determination ofdumping with respect to the subject goods originating in or exported from France, inaccordance with subsection 38(1) of SIMA and determined that there was evidence thatdisc10sed a reasonable indication that the dumping had caused injury.6

3 Exhibit 3: CBSA - Statement of Reasons - Initiation of an investigation respecting the alleged injuriousdumping of certain filter-tipped cigarette tubes originating in or exported from France and the FederalRepublic of Germany.4 Exhibit 2: CTC Tube Company of Canada Inc. Non-Confidential version of the dumping compIaint oncigarette tubes from France and the Federal RepubIic of Germany.5 Exhibit 7: CBSA - Statement of Reasons - PreIiminary Determination of an investigation respecting thedumping of certain filte- tipped cigarette tubes originating in or exported from France and Termination ofan invèstigation respecting the dumping of certain filter tipped cigarette tubes originating in or exportedfrom the Federal RepubIic of Germany.6 Ibid.

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[11] On April 12, 1999, the Deputy Minister accepted an undertakingfrom both theexporter A1paci S.a.r.l. (A1paci) of France and the vendor Gizeh Raucherbedart GmbH &Co. KG (Gizeh) ofthe Federal Republic of Germany (hereinafter collective1y referred toas the "undertaking"), and suspended the investigation.7 Alpaci is the producer of thesubject goods and only sells in its domestic market while Gizeh is the vendor and sellsAlpaci's product to the Canadian market. Both companies are related and are part of alarger corporation.8 For sales to Canada, Alpaci is considered by the CBSA to be theexporter ofthe subject goods, while Gizeh is considered to be the vendor.

[12] The undertaking covered substantially all of the dumped goods and provided thatthe priees of the imported goods would increase to a level sufficient to e1iminate theinjury caused to the complainant by the dumping. The undertaking was acceptedpursuant to subsection 49(1) of SIMA and the investigation was suspended in accordancewith section 50 of SIMA.9

[13] On January 19,2004, thy President of the CBSA issued a notice and initiated areview of the undertaking prior to its five-year expiry date. On April 8,2004, in light ofthe evidence placed before him during the course of the undertaking review, the Presidentof the CBSA, pursuant to paragraph 53 of SIMA, renewed the undertaking for a furtherperiod offive years. 10

[14] Pursuant to subsection 53(1) of SIMA, the President of the CBSA must againreview the undertaking before the expiry of five years from the date on which theundertaking was last renewed. Therefore, on January 5, 2009, the CBSA initiated areview of the undertaking.

PRODUCT INFORMATION

Product Definition

[15] The goods subject to the undertaking are defined as:

Filter-tipped cigarette tubes, excluding those which bear the trademark orbrand name of a finished or ready-made cigarette, originating in orexported from France.

7 Exhibit 10: Exporter - Non-confidential version of the undertaking submitted to the Deputy Minister ofNational Revenue.s Exhibit 31: GIZEH Raucherbedarf GmbH - Non-Confidential version of Exporter Response to Requestfor Information.9 Exhibit II: CBSA - Statement of Reasons - Acceptance of an Undertaking and suspension of the dumpinginvestigation respecting certain filter-tipped cigarette tubes originating in or exported from France.lOExhibit 12: CBSA Statement of Reasons - Review of an Undertaking respecting certain filter-tippedcigarette tubes originating in or exported from France.

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Product Description

[16] Cigarette tubes are used by consumers to make finished cigarettes by insertingfine cut tobacco into the tubes, usually with the aid of a small machine or injector. Theindustry standard in Canada for regular length filter-tipped cigarette tubes is 74 mm,while the standard for king size filter-tipped cigarette tubes is 84 mm.

[17] Filter-tipped cigarette tubes are usually sold in boxes of200 tubes under variousbrand names. The boxes are generally packaged for wholesale distribution in casescontaining 10,000 tubes in configurations of 50 boxes of 200 tubes.

[18] The filter consists of a plug of crimped acetate tow and a filter wrap made frompaper. The cigarette paper may be treated with a chemical to facilitate either a fast orslow bum rate. The cigarette tubes generally appear white in colour, although the portioncovering the filter may be made from paper, which is either white or tan hue (solid orspeckled).

CLASSIFICATION OF IMPORTS

[19] Filter-tipped cigarette tubes are properly classified in Schedule 1of theCustoms Tariffunder tariffitem number 4813.10.00.00 of the Harmonized System (HS).This HS code is for convenience of reference only. Reference to the product definitionshould be made for the authoritative details on the subject goods.

PERlOD OF REVIEW

[20] The period ofreview (POR) for this undertaking is from April 7,2004 toFebruary 18,2009 (closing of the record date).

CANADIANINDUSTRY

[21] CTC Tube, the complainant in the original investigation and sole participant in thelast review, previously accounted for the majority of domestic production oflike goods.

[22] At the initiation of the current review of the undertaking, the CBSA, through itsresearch of public records, could not find contacts, addresses or confirm the continuingoperation of CTC Tubes. This lack of CUITent public information on the company has ledthe CBSA to conclude that CTC Tube has ceased operation as a separate legal entity.

[23] Van Nelle Canada Limited (Van Nelle), identified in the last review under thename Efka Canada Limited, and Top Tubes Canada (Top Tubes) were identified as tworemaining potential Canadian producers of cigarette tubes.

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[24] Requests for Information (RFI) were sent to both companies. Top Tubessubmitted a letter to the CBSA in which it confirmed its non-involvement in the likegoods as it only now produces goods bearing the brand name of a ready-made cigarette. IlVan Nelle did not respond to the RFI for this review.

[25] Based on the information placed on the record during the course of the presentreview of the undertaking, the CBSA cannot confirm the existence ofCanadianproduction of the like goods.

CANADIAN MARKET

[26] The lack of cooperation from exporters, importers and Canadian producers createddifficulties in establishing the size of the Canadian market for filter-tipped cigarette tubes.Furthermore, the Customs tariff item number encompasses filter-tipped cigarette tubes aswell as other tobacco paper products, making it difficult to accurately estimateimportations of filter-tipped cigarette tubes, using this information. The only party toprovide any information to the CBSA concerning the Canadian market for the filter­tipped cigarette tubes was Gizeh, the German vendor for Alpaci products.

[27] The Canadian market for filter-tipped cigarette tubes can, therefore, not beestimated accurately without sales information from the Canadian producers andimporters. Importation statistics obtained from the CBSA's Customs CommercialSystem (CCS), corroborated with the information provided by Gizeh, were neverthelessused to estimate the importation trends for the subject goods.

Table 1

Volume (in mille)*Value (in Canadian dollars)* 1 Mille equa1s 1,000 cigarette tubes

Il Exhibit 29: Response from producer confirming it does not produce like goods.12 Exhibit 32: Finalized CBSA 1mport Statistics, 2004-2008

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UNDERTAKING

[28] As previously mentioned, on April 12, 1999, the Deputy Minister accepted anundertaking from the exporter and vendor, suspending the investigation regarding thesubject goods. The undertaking priees agreed upon between the exporter, vendor and theDeputy Minister were set at a level to eliminate the injury caused by the dumping, but notto eliminate the dumping entirely. This undertaking price allowed the exporter to sellsubject goods to Canada at a lower price than their respective estimated normal value.

COMPLIANCE

[29] Complianee reviews were conducted by the CBSA in order to ensure that Gizehwas abiding by the requirements of the undertaking. These compliance reviews foundthat Gizeh eeased, as of 2006, to sell subject goods to Canadian importers, giving up itspresence in the marketplace.

[30] The CBSA determined that Gizeh had not violated the undertaking agreement, aswhen it sold the goods to Canada prior to 2006, it did so at a price equal to or above theundertaking price agreed to in 1999.

PARTICIPANTS IN THE REVIEW OF THE UNDERTAKING

[31] The CBSA' s notices concerning the review and relevant Requests for Information(RFI) were sent to two potential Canadian produeers of filter-tipped cigarette tubes asweIl as to potential exporters, vendors and importers of the subject goods.

[32] None ofthe Canadian producers responded to the CBSA's RFr. However,Top Tubes provided a statement in which it explained its non involvement by the fact thatit now only produces cigarette tubes bearing the brand name of a ready-made cigarette(i.e., non-like goods). As such, Top Tubes is not considered a Canadian producer forpurposes ofthis undertaking review.

[33] Gizeh, the German vendor for Alpaci products and a signatory to the undertaking,was the sole respondent to the CBSA's RFIs. It provided a partial reply on both Alpaci'sand its own behalf. The two companies are related as they form part of a largerconglomerate. Gizeh has exclusive rights over exports of Alpaci products.

[34] No responses to the RFI were received from any Canadian importers offilter-tipped cigarette tubes.

[35] No case arguments or reply submissions were submitted to the CBSA.

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INFORMATION USED BY THE PRESIDENT

Administrative Record

[36] The information used and considered by the President for purposes ofthisundertaking review proceeding is contained on the administrative record. Theadministrative record includes the exhibits listed on the CBSA's Exhibit Listing, which iscomprised of CBSA exhibits and information submitted by interested persons, includinginfomiation which they feel is relevant to the decision. This information may consist ofexpert analysts' reports, excerpts from trade magazines and newspapers, orders andfindings issued by authorities of Canada or of a country other than Canada, documents .from international trade organizations such as the World Trade Organization or responsesto the RFIs submitted by Canadian producers, importers and exporters. In this case, verylittle information was available from these sources.

[37] For purposes of an undertaking review, the CBSA sets a date after whichno "new" information may be placed on the administrative record. This is referred to asthe "closing of the record date". This allows participants time to prepare their casearguments and reply submissions based on the information that is on the administrativerecord as ofthe closing ofthe record date. For this undertaking review, theadministrative record closed on February 18,2009.

PROCEDURAL ISSUES

[38] There were no procedural issues during the course ofthis undertaking reviewproceeding.

POSITION OF THE PARTIES

[39] As indicated earlier, the CBSA received only one partial response to its RFI fromGizeh, a signatory to the undertaking.

GIZEH Raucherbedarf GmbH13

[40] Gizeh is the German vendor of the subject goods. In its response to the CBSA'sRFI, Gizeh presented arguments in favour of the undertaking not being renewed.

13 Exhibit 31: Gizeh Raucherbedarf GmbH - Non-Confidential Version of Exporter Response to Requestfor Information.

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[41] Gizeh stated that demand for cigarette tubes in the Canadian market peaked in2004, when the industry was utilizing full capacity to respond to an exceeding demand.Gizeh further asserts that the market contracted in 2005 with changes in Canadianlegislation which made the subject and like goods less attractive to consumers. TheCUITent demand is comparable to 2005 levels, however excess production capacity fromprevious years ensures that global priees for the subject goods remain low.

[42] Gizeh's response to the RFI indicates that importations ofsubject goods fromFrance ceased, starting in 2006. Gizeh explained this situation with the followingreasons:

Ct the undertaking imposed priee levels;Ct the unfavourable exchange rate between the Canadian dollar and the Euro; and,Ct the increasing market share of contraband tobacco products in Canada.

[43] Gizeh does not foresee the future Canadian market for the subject goods changing,regardless of the undertaking being renewed or allowed to expire. Gizeh considers thatthe subject goods in Canada have lost appeal due to changes in Canadian exciselegislation which rendered "make-your-own" cigarettes uncompetitive withready-made cigarettes. Gizeh also presented an opinion regarding an allegedly growingCanadian contraband market for tobacco products, which it considers has overtaken thelegal market for the subject goods and other products. The unfavourable exchange ratesaffecting the Canadian dollar and the Euro are also unlikely to change, states Gizeh,leading to very little foreseeable variation in the import trends of subject goods in Canadafor the years to come.

[44] Gizeh states that its Canadian market would neither grow in actual volume norwould it gain strategie importance should the undertaking be terminated or allowed toexpire, and concludes in stating that the undertaking should not be renewed as it simplydoes not make economical sense for the company to sell to Canada under existing marketconditions.

CONSIDERATION AND ANALYSIS

[45] Pursuant to the review process of section 53 of SIMA, the President must reviewthe undertaking before the expiry of five years from the date on which the undertakingwas accepted. If, on review, the President is satisfied that the undertaking continues toserve the purpose for which it was intended, and that he is not required to terminate itpursuant to section 52, the President is required to renew the undertaking for a furtherperiod of not more than five years.

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[46] In assessing whether the undertaking continues to serve the purpose for which itwas intended, the President must be satisfied that the undertaking continues to protect thedomestic industry from injurious dumping as per paragraphs 49(1)(a), elimination ofmargin of dumping and (h), elimination of injury caused by the dumping. Therefore, thePresident must be satisfied that there is a likelihood of continuation or resumption ofdumping and that the continuation or resumption of dumping willlikely cause or threatento cause injury to the domestic industry.

Likelihood of Continuation or Resumption of Dumping

[47] In its response to the CBSA's RFI, Gizeh makes reference to low world prices forthe subject goods caused by excess capacity and supply which was brought about by peakdemand in 2005. The CBSA has confirmed this trend in world pricing of the subjectgoods.

[48] Both the CBSA's CCS data and Gizeh's response to the RFI indicate that exportsof the subject goods by Gizeh ceased in 2006. CBSA enforcement data has not revealedthe presence of any other exporter of subject goods from France since that time. WhileGizeh still mentioned T&R Tubes as its importer in Canada, Gizeh has not had a marketpresence in Canada for over three years. 14

[49] The Euro to Canadian dollar exchange rate has fluctuated significantly since 2004.Exchange rates were unfavorable to Gizeh in 2004 however, starting in 2005 through to2007, the trend reversed. In spite of this trend, Gizeh stopped shipping to Canada duringthis time period. The exchange rate between the Euro and dollar is now back to 2004levels and this trend does not show any indication of reversing. Given that Gizeh did nottake advantage of the favorable exchange rate in years 2006 and 2007, very littleinference can be drawn as to the impact of exchange rates on Gizeh's sales to Canada.

Table 2

[50] There is no information on the administrative record that addresses Gizeh'scontention that the Canadian illicit cigarette trade is displacing legal tobacco products inthe market.

[51] Cigarette tubes are not charged any duties under the provisions of the Excise Act,2001. Gnly the manufactured tobacco used in the assembly of the "make-your-own"cigarette incur excise duty.

14 Exhibit 32: Finalized CBSA Import Statistics, 2004-2008.15 Bank of Canada Annual Average Rates www.bankofcanada.ca. February 2009.

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Table 3

01/01/200801/07/200601/07/2003

0.42500.41030.3963

3.60%3.53%

0%

57.850055.900053.9810

3.49%3.55%

0%

[52] As indicated in the above table, Gizeh's contention that changes in exciselegislation have put "make your own" cigarettes at a disadvantage is not supported by thefacts as the excise duty increases involving manufactured tobacco have followed thoseapplied to ready-made cigarettes. The subject goods are mostly intended for use withmanufactured tobacco and an injector.

[53] Based on the information presented above, the low world market prices for thesubject goods as well as on information which was presented by Gizeh in its confidentialresponse to the RFI, the CBSA is of the opinion that there is sufficient information toconclude to the likelihood of continuation or resumption of dumping.

Likelihood of Injury to the Domestic Industry

[54] Ifthe President is satisfied that there exists a likelihood of a continuation orresumption of dumping were the undertaking terminated or allowed to expire, then thePresident must address whether such a continuation or resumption of dumping is like1y tocause injury to the domestic industry.

[55] At the time of acceptance of the undertaking in 1999, the complainant,CTC Tube, had indicated that it was suffering material injury due to the dumping of thesubject goods from France mainly in the form of price erosion, lost sales, reducedprofitability, reduced capacity utilization, reduced cash flow and a decline in return oninvestments.

[56] In 2004, the review of the undertaking conducted by the CBSA concluded to thelikelihood of resumption or continuation of injury to the domestic industry should theundertaking be allowed to expire.

[57] As stated earlier, the CBSA was unable to locate or confirm the continuingoperation of CTC Tube through research of public records during the course of theCUITent review of the undertaking. As such, the CBSA concludes that CTC Tube hasceased operations as a separate legal entity.

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[58] Top Tubes, identified as a potential Canadian producer, stated in its reply to theCBSA that its production now consists entirely of cigarette tubes bearing the name of aready-made cigarette. As such, Top Tubes is not considered a Canadian producer of thelike goods for the purposes ofthis undertaking review. Van NeHe, the only otherpotential Canadian producer did not to respond to the CBSA's RF!.

[59] Given the CUITent circumstances, the CBSA is unable to confirm the existence ofCanadian production for the like goods.

Termination

[60] Section 53 of SIMAI6 directs that the President must review the undertakingbefore the expiry of five years from the date on which the undertaking was accepted orrenewed. If, on review, the President is satisfiedthat the undertaking continues to servethe purpose for which it was intended, and that he is not required to terminate theundertaking for the reasons stipulated in section 52 of SIMA, the President is required torenew the undertaking for a further period ofnot more than five years.

[61] The wording of section 53 of SIMA states:

53. (1) Except where the Tribunal has made an order or finding undersubsection 43(1) that the dumping or subsidizing of the goods to which thepre1iminary determination applies has caused injury or retardation or isthreatening to cause injury and that order or finding has not been rescinded undersubsection 76(4), (4.1) or (4.11) or 76.1(2), the Deputy Minister shaH review theundertaking before the expiration of five years from the date on which it wasaccepted and before the expiration of each subsequent period, if any, for which itis renewed pursuant to this section and if, on any such review, theDeputy Minister is satisfied

(a) that the undertaking continues to serve the purpose for which it was intended,and

(b) that the Deputy Minister is not required to terminate it under section 52,

the Deputy Minister shaH renew the undertaking for a further period of not morethan five years.

16 Supra Note l

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[62] Paragraph 53(1)(b) provides that the Deputy Minister (now the President of theCBSA) must consider the provisions of section 52 prior to making a decision whether torenew an undertaking. Subsection 52(1.2) requires the termination of an undertakingwhere the conditions in paragraph 49(1)(a) (elimination ofmargin of dumping) or (b)(elimination of injury caused by the dumping) no longer exist. In addition,subsection 52(1.3) states that the termination of an undertaking under subsection 52(1.2)terminates aIl proceedings under the SIMA.

[63] Subsections 52(1.2) and 52(1.3) state:

52(1.2) Except where the Tribunal has made an order or finding undersubsection 43(1) that the dumping or subsidizing of the goods to which thepreliminary determination applies has caused injury or retardation or isthreatening to cause injury, and that order or finding has not been rescinded undersubsection 76(4), (4.1) or (4.11) or 76.1(2), the Deputy Minister shaIl terminatethe undertaking or undertakings where, at any time after accepting the undertakingor undertakings, the Deputy Minister is satisfied that, notwithstanding thetermination of the undertaking or undertakings, the condition in paragraph49(1)(a) or (b), as the case may be, would no longer exist.

52(1.3) A termination of an undertaking under subsection (1.2) terminates aIlproceedings under this Act respecting the dumping or subsidizing of the goods towhich the undertaking relates, unless, in any case where the Deputy Minister hasaccepted two or more undertakings, the Deputy Minister, for good reason,otherwise directs.

[64] There is no longer a likelihood of injury to the domestic industry should theundertaking not be renewed. As such, if the President is satisfied that the conditiondescribed in paragraph 49(1)(b) of SIMA, under which the undertaking was accepted,would no longer exist in the absence of the undertaking, the undertaking must beterminated pursuant to subsection 52(1.2) and aIl proceedings must be terminatedforthwith pursuant to subsection 52(1.3) of SIMA. Therefore, a decision pursuant tosubsection 52(1.2) precludes a decision whether to renew the undertaking pursuant tosection 53.

CONCLUSION

[65] Despite the likelihood of continuation or resumption of dumping should theundertaking be terminated, the fact that no Canadian production of like goods could beconfirmed in this reviewof the undertaking provides sufficient grounds to conclude thatthe injury caused by the dumping, under which the undertaking was accepted, would nolonger exist in the absence of the undertaking.

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[66] Based on the foregoing reasons and having considered the relevant information onthe record, the President has determined that the condition described inparagraph 49(1)(b) of SIMA, under which the undertaking was accepted, would no longerexist in the absence of the undertaking. Accordingly, the President has terminated theundertaking in accordance with subsection 52(1.2) of SIMA.

FUTURE ACTION

[67] As per subsection 52(1.3) of SIMA, a termination ofthe undertaking undersubsection 52(1.2) terminates aH proceedings under the Act respecting the dumping offilter-tipped cigarette tubes, excluding those which bear the trademark or brand name of afinished or ready-made cigarette, originating in or exported from France.

INFORMATION

[68] For further information, please contact the officer listed below:

SIMA Registry and Disclosure UnitAnti-dumping and Countervailing ProgramCanada Border Services Agency100 Metcalfe Street, Il th floorOttawa ON K1A OL8CANADA

Telephone: Antoine Parker 613-954-7386

Fax:

E-mail:

Web site:

613-948-4844

simaregistry@cbsa-asfc.gc.ca

www.cbsa-asfc.gc.ca/sima-Imsi/er-rre/menu-eng.html

Directo GeneralTrade Programs Directorate

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